Jerusalem — Egypt is caught in an authoritarian vise. On the one hand, the Muslim Brotherhood-affiliated former president Mohamed Morsi and his Islamic supporters trampled roughshod over the rights and liberties of Coptic Christians, women, and secular Egyptians. On the other hand, the reintroduction of a military regime has ushered in a kind of Act II of the deposed president and air-force commander Hosni Mubarak.

In early August, the Middle East expert Dr. Jonathan Spyer wrote a prescient analysis of the clash between the radical Islamic Muslim Brotherhood movement and the authoritarian military regime.

Spyer argued that General Abdel Fattah al-Sisi, who removed Morsi from office in July, is an extension of Egypt’s prior military rulers – Gamal Abdel Nasser, Anwar Sadat, and Hosni Mubarak. His main thesis: “The point to be borne in mind is that there remain two forces of note in Egypt: the army and the Brotherhood. Everything else is a decoration.”

President Obama’s announcement today that he was canceling a joint U.S.-Egypt military exercise will not have any meaningful effect on al-Sisi’s anti-democratic and violent conduct. Egypt’s regime is now largely dependent on Saudi Arabia, Kuwait, and the United Arab Emirates for its financial support. The three Gulf monarchies have pledged a total of $12 billion to Egypt.

In contrast, the United States provides $1.5 billion each year to Egypt.

Egypt’s military views its conflict with the Muslim Brotherhood in epic battlefield terms. U.S. aid was never a decisive factor in the psychology of Egypt’s military. Retention of raw power trumps economic aid and democracy.

Though the Islamists are taking organizational hits, they still are able to activate their base of Muslim Brotherhood members, as well as to mobilize hitherto politically inactive devout Muslims.

To state the obvious: There are competing bad options in Egypt. It is a depressing political stage in post-Mubarak Egypt. Obama’s policy toward Egypt has been adrift. However, he captured a pressing point today in his announcement: “Let me make one final point. America cannot determine the future of Egypt. That’s a task for the Egyptian people.”

But it would not be a prudent move for the U.S. and its democratic-capitalist allies to abandon Egypt to the forces of the highly reactionary and anti-democratic Gulf monarchies. Take the example of Denmark, which announced today that it has suspended its development aid to Egypt.

Despite the terribly bleak juxtaposition between Islamists and a military form of social order, democracy remains a real possibility inherent in Egyptian society. That may sound—at this moment—excessively optimistic, but recent global history indicates that democracy prevails in the long run.

— Benjamin Weinthal is a Berlin-based Fellow at the Foundation for Defense of Democracies.Follow him on Twitter @BenWeinthal.